Business Model Generation (Alexander Osterwalder & Yves Pigneur)

Business model canvas is the new hot thing and "Business Model Generation" is the book that describes it.The first thought that popped up in my mind when I got my hands on a copy, was "Wow, this is gorgeous". Which in my suspicious mind turned into: "Ok, so what are they trying to hide behind all this glossy surface."

But after reading the book, I have to put my suspicions to shame. This is just an unusually beautiful book, where a lot of time and effort has gone into graphical design with the purpose of better getting the point across. The contrast between this and my previous read (The Four Steps to the Epiphany) was quite striking, especially since the copy I had of The Four... was a weathered library copy.

But looking beyond the surface, it is clear that Osterwalder et. al. share some of their basic tenets with Steve Blank. The process of creating a business model is an iterative, incremental one that requires customer interaction. But when Steve's main focus is the process for building a successful business, the Business Model Generation authors are more interested in creating new and innovative business models ¹. They give practical tools to this end, more specifically the business model canvas and long list of practices to aid in the creative process, such as empathy maps, visual storytelling, prototyping and storytelling.

The thing I valued in this book is all the practical examples of business models and how they could have been modelled using the canvas. Of course, the picture can be interpreted too simple-mindedly if one, e.g., reads the Apple example in the book and believes that the iPhone AppStore was born as a result of good business modelling. All of us who have at some point jailbroken their iOS device knows that the AppStore came from a clear need loudly communicated by the end-users, rather than the innovative business vision of Apple. The value of examples like the AppStore for me lies in developing a better understanding of the visual language that the canvas represents. This also helps in seeing and understanding patterns of business models. The list of patterns in the book is another valuable asset.

For more details on the business model canvas, check out their homepage.

¹Actually, comparing the Steve Blank and Osterwalder is a bit unfair, since they deal with such different aspects of business modelling. To my defense, I'm not the only one who's made the connection. For a clear description of how the two go together, check out this presentation by Alexander Osterwalder or this blog entry by Steve Blank.